Every Car dealer who sell used vehicles must comply with the
Federal Trade Commission's (FTC's) Used Car Rule, and post a Buyer Guide Form
before displaying a vehicle for sale. The
Buyers Guide must be displayed prominently and conspicuously on or in a vehicle
when a car is available for sale. The Buyers Guide must be displayed
prominently and conspicuously on or in a vehicle when a car is available for
sale. The Guides must be printed in 100% black ink on white paper cut to at
least 11" x 7 1/4." These requirements cannot be modified in any way.
You may use colored ink to fill in the blanks.
Dealers who infringe the Used Car Rule may be subject to
penalties of up to $40,000 per violation in FTC enforcement actions. Many
states have laws or regulations that are similar to the Used Car Rule. Some
states incorporate the Used Car Rule by reference in their state laws. As a
result, state and local law enforcement officials may have the authority to
ensure that dealers post Buyers Guides and to fine them or sue them if they do
not comply.
At the top of the Guide, fill in the vehicle make, model, model
year, and vehicle identification number (VIN). Write in a dealer stock number
if you wish.
On the back of the Guide, fill in the name and address of your
dealership. Also fill in the name (or position) and the telephone number of the
person the consumer should contact with complaints.
You may include a signature line on the Guide and you may ask
the buyer to sign to acknowledge that he or she has received the Guide. If you
opt for a signature line, you must include a disclosure near it that says:
"I hereby acknowledge receipt of the Buyers Guide at the closing of this
sale."
Warranty. If
you offer the vehicle with an express warranty, you must check the box next to
the heading "Warranty" and complete that section of the Guide.
Warranties required by state law must be disclosed in this section. Your state
Attorney General can tell you about state warranty requirements. The Buyers
Guide has two versions: One says "As
Is-No Dealer Warranty;" the other says "Implied
Warranties only."
As Is-No Dealer Warranty. If state law allows it,
and you choose not to offer a warranty — written or implied — you must use the
"As Is" version and check the box next to the heading "As Is-No
Dealer Warranty" on the Guide.
Implied Warranties Only. In states that limit or
prohibit the elimination of implied warranties, you must use the "Implied
Warranties Only" version and check the box next to the "Implied
Warranties Only" if you don't offer a written warranty.
Is the Warranty "Full" or
"Limited"?
For a warranty to be considered "full:" Warranty
service must be provided to anyone who owns the vehicle during the warranty
period. Warranty service must be provided free of charge when necessary, even
for services like removing and reinstalling a system covered by the warranty. The
consumer must be able to choose either a replacement or a refund if the vehicle
can't be repaired after a reasonable number of tries. The consumer is not
required to take any action to receive service, except to give notice that
service is needed. Service must be rendered after notice unless the warrantor
can demonstrate that it is reasonable to require consumers to do more than give
notice. The warranty is considered "limited"
if any of these conditions doesn't apply.
What Percentage of
Costs Does the Warranty Cover?
Fill in the percentage of parts and labor costs covered by the
warranty in the spaces provided. If a deductible applies to repairs made under
the warranty, put an asterisk next to the number and explain the deductible in
the "systems covered/duration" section. For example, "*A $50
deductible applies to each repair visit."
What Systems Are
Covered? For How Long?
In the left hand column, you must specify each system that's
covered by the warranty. In the right hand column, you must state the length of
the warranty for each system.
What if the
Manufacturer’s Warranty Still Applies?
If the manufacturer's warranty hasn't expired, you may disclose
this fact by checking the box, "MANUFACTURER'S WARRANTY STILL APPLIES. The
manufacturer's original warranty has not expired on some components of the
vehicle,” in the Non-Dealer Warranties for this Vehicle section of the Buyers
Guide. Such coverage is considered a service contract. However, you may check
the "Warranty" box if you pay for coverage from the manufacturer and
the consumer doesn't have to pay anything more than the price of the vehicle to
get the coverage
You must give the buyer the original or a copy of the vehicle's
Buyers Guide at the sale. The Guide must replicate all final changes.
Your written warranty and the Buyers Guide must be on separate
documents. Another federal rule — the FTC's Rule on Pre-Sale Availability
of Written Warranty Terms — requires that you display written warranties
in close proximity to the vehicle or make them available to consumers, upon
request, before they buy.
What Disclosures
Should I Make if I Offer a 50/50 Warranty or Another Type of Split Cost
Warranty?
Split cost warranties are those under which the dealer pays less
than 100% of the cost for a warranty repair. This type of warranty includes
50/50 warranties where the dealer pays 50% of the cost for a covered repair and
the buyer pays the remaining 50%. Another type of split cost warranty is one
under which the buyer pays a deductible amount and the dealer pays the
remaining cost for the repair. If you offer a split cost warranty that requires
you to pay a percentage of the repair cost for covered repairs, you should
include the following disclosures in your warranty document: The percentage of
the total repair cost you will pay. The percentage of the total repair cost the
buyer must pay. If your warranty requires buyers to pay a deductible, your
warranty document should disclose the deductible amount and the details as to
when and under what circumstances the deductible must be paid.
Dealers offering split cost warranties can require that buyers return to the dealer for warranty repairs. If your warranty includes this restriction, however, you should provide an estimate of the total repair cost before work is started. This will allow the buyer to decide whether to approve the repair or have the work done elsewhere.
Dealers offering split cost warranties can require that buyers return to the dealer for warranty repairs. If your warranty includes this restriction, however, you should provide an estimate of the total repair cost before work is started. This will allow the buyer to decide whether to approve the repair or have the work done elsewhere.
